Salungano Group Limited · JSE:SLG
Salungano — H1 FY2022 Earnings Presentation
23 slides from Salungano's earnings presentation, September 2021
Slide 1: Results Presentation for the Six Months Ended 30 September 2021
RESULTS PRESENTATION FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2021 LAYING THE FOUNDATION TO GROW SUSTAINABLY
Slide 2: Disclaimer and Contents
DISCLAIMER AND CONTENTS This presentation is published solely for informational purposes and does not constitute investment, legal, tax or other advice nor is it to be relied upon in making an investment decision. Information contained herein has been Ref Title Slide taken from sources considered by
Slide 3: HY22 Operational and Financial Overview
HY22 OPERATIONAL AND FINANCIAL OVERVIEW COAL MINED COAL SALES REVENUE EBITDA 4.8Mt 4.9Mt R2.7 billion R416 million (HY21: 4.4Mt) (HY21: 4.1Mt) (HY21: R2.1 billion) (HY21: R315 million) NET PROFIT GEARING EPS CASH GENERATED R81 million 49% 19.72 cents R288 million (HY21: R11 million) (FY21: 55%) (HY2
Slide 4: FY22 Strategy Update
FY22 STRATEGY UPDATE • No Covid-19 related fatalities or material work stoppages across all • Navigate through COVID-19 operations STABILITY • Record half-year production achieved in HY22 • Achieve production and sales targets • Lower offtake by Eskom impacting achievement of sales targets • Continu
Slide 5: Wescoal Mining Segment
WESCOAL MINING SEGMENT
Slide 6: Health and Safety
HEALTH AND SAFETY Lost Time Injury (LTI) Performance Total Recordable Injury Frequency Rate (TRIFR) Performance 2 0.72 1 0.55 1.02 0.71 0.72 1 1 0.65 0.73 0.77 0.37 0.68 0.26 0.28 0.00 0.18 0.12 0.29 0.37 0.32 0 0 Apr 21 May 21 Jun 21 Jul 21 Aug 21 Sep 21 Apr 21 May 21 Jun 21 Jul 21 Aug 21 Sep 21 LT
Slide 7: Mining Segment ROM and Sales Performance
MINING SEGMENT ROM AND SALES PERFORMANCE ROM Production (Kt) Mining Sales (Kt) (52) (25) HY21 Vanggatfontein Elandspruit Khanyisa Moabsvelden HY22 HY21 Vanggatfontein Elandspruit Khanyisa *Moabsvelden HY22 *Includes own and third-party sales 7
Slide 8: Moabsvelden Performance Update
MOABSVELDEN PERFORMANCE UPDATE Monthly ROM (Kt) - HY22 Monthly Sales (Kt) 400 429 431 232 221 219 247 199 276 169 195 173 175 162 152 111 119 124 134 95 158 140 84 47 230 155 113 112 63 79 Apr May Jun Jul Aug Sep Apr May Jun Jul Aug Sep HY21 HY22 OWN SALES HY22 BUY-INS • Box cut development progress
Slide 9: Moabsvelden Project Development Status
MOABSVELDEN PROJECT DEVELOPMENT STATUS PCD 9
Slide 10: LIFEX Projects
LIFEX PROJECTS KHANYISA VG3 UG AND DRILLING CAMPAIGN Boundary coal mining • Drilling campaign to start in Q3’FY22 • Reserves lying within mine reserves boundary • A drilling contractor has been selected • Boundary mining is currently in progress • Capex approval signed and completed • Reserves of ab
Slide 11: Wescoal Trading Segment
WESCOAL TRADING SEGMENT
Slide 12: Overview
OVERVIEW • Performance continued during the various levels of COVID-19 • No reportable HSEC incidents • Major customer increased coal consumption, albeit at reduced pricing and margins • In general, improved margins and volumes were achieved compared to the prior period, except for supply to the maj
Slide 13: Overview
OVERVIEW Sales (Kt) Sales (Rm) 77 82 77 66 69 71 63 71 70 60 54 53 57 57 58 54 49 48 43 43 41 41 32 29 Apr May Jun Jul Aug Sep Apr May Jun Jul Aug Sep HY21 HY22 HY21 HY22 • HY22 sales volumes increased by 27% to 338Kt (HY21: 266Kt) • HY22 revenue increased by 8.0% to R396m (HY21: R367m) • Volumes to
Slide 14: Wescoal Financials
WESCOAL FINANCIALS
Slide 15: Financial Salient Features
FINANCIAL SALIENT FEATURES REVENUE GROSS PROFIT R2.7 billion R342 million • Improvement in all indicators primarily due to (HY21: R2.1 billion) (HY21: R252 million) ramp up at the Moabsvelden operation EBITDA CASH GENERATED • Continuous review and optimization of costs R416 million R288 million • Re
Slide 16: Revenue and Operating Profit
REVENUE AND OPERATING PROFIT MAINTAINED SALES REVENUE Half-year (Rm) Revenue Diversity 2 666 HY22 2 089 600 2100 500 37% 400 63% 300 190 200 Eskom 102 Other 100 HY21 0 (100) HY21 HY22 27% 73% Revenue Operating profits 16 Revenue includes coal sales and transport revenue
Slide 17: Statement of Comprehensive Income – Extracts
STATEMENT OF COMPREHENSIVE INCOME – EXTRACTS HY22 HY21 Rm Rm Revenue 2 666 2 089 • Revenue increased due to higher sales Gross profit 342 252 volumes • Gross profit margin at 12.8% from 12.0% in Operating profit 190 102 the prior period, due to higher production, cost optimisation, ramp up of Moabsv
Slide 18: Statement of Financial Position
STATEMENT OF FINANCIAL POSITION Reviewed Audited 30 Sep 2021 31 March 2021 Rm Rm Non-current assets 2 918 2 849 Property, plant and equipment 2 480 2 450 Investments Investments 76 28 Increase in investments due to subscription into Arnot joint venture Goodwill and intangible assets 66 62 Finance le
Slide 19: Statement of Financial Position | Continued
STATEMENT OF FINANCIAL POSITION | CONTINUED Audited HY 2022 31 March 2021 Rm Rm Total shareholders’ funds 930 849 Non-current liabilities 1 553 1 421 Finance lease liabilities 159 191 Rehabilitation liability Increase due to additional disturbance Rehabilitation provision 1 174 999 primarily at Moab
Slide 20: Capital Allocation
CAPITAL ALLOCATION 1,200 +12 1,000 +49 +84 +14 -31 800 +43 -288 600 1,021 905 400 200 0 Net debt Cash Net interest Tax paid CAPEX Investment in Purchase Finance Net debt 31 March generated joint venture rehab lease liability 30 2021 from investment September operations 2021 20
Slide 21: Lending Structure
LENDING STRUCTURE DEBT PROFILE OF CURRENT FACILITIES Debt profile Rm 1,400 1,200 1,000 800 600 400 200 0 Mar 2022 Mar 2023 Mar 2024 Sep 2021 Jul 2022 Sep 2022 Jul 2023 Sep 2023 Jul 2024 Nov 2021 Jan 2022 May 2022 Nov 2022 Jan 2023 May 2023 Nov 2023 Jan 2024 May 2024 Term Loan RCF GBF ABF Lenders’ re
Slide 22: Wescoal Looking Ahead
WESCOAL LOOKING AHEAD
Slide 23: Looking Ahead: Focus Points
LOOKING AHEAD FOCUS POINTS Risk management Improve profitability ESG Strategy and growth • COVID-19 • Continue to reap savings from • Full implementation in FY22 • Sweat current assets • Debt and liquidity cost reduction initiatives • Underpinned by a strategy • LOM extensions management • Benefit f